Keep Calm and Brexit On

Gulf Coast cautious but so far unaffected by UK vote.

Great Britain may have voted to leave the European Union, but that doesn’t mean British buyers will soon take their money out of Gulf Coast real estate. When voters in the United Kingdom voted in June to begin the so-called “Brexit” process, formally calling on national leaders to begin the official process of leaving the union, markets took a hit and leaders in finance, tourism and real estate anxiously tried to figure out what the change would mean around the world. Even though Florida relies heavily on British travelers and investors, local hospitality and home sales have yet to suffer a negative impact from the vote, but they certainly are paying attention to what happens now overseas.

Patricia Tan, an agent with Caldwell Banker Residential Real Estate, specializes in selling Sarasota area real estate to international visitors. Originally from Britain herself, she regularly works with overseas buyers who want to own land in the Sunshine State. Doing these trans-Atlantic transactions for years, she learned buyers eyeing luxury estates in a tropical paradise have their investments in more than just British currency. It’s the strength of the US dollar that will drive Florida decisions, she says: “The pound has been very weak against the dollar for 12 to 18 months, but there has been no slowdown in business.”

Tourists, though, can be more temperamental. Virginia Haley, president of Visit Sarasota County, says any type of economic uncertainly brings potential disruption in the travel habits of consumers. Since about 60,000 British visitors come to the Gulf Coast every year—about 3 percent of all visitors to Sarasota County annually—hoteliers claim a little anxiety over the Brexit vote and the impact it could have on the value of British currency and the UK economy overall. That said, bookings from the UK have actually been up in the weeks around the Brexit vote. That doesn’t eradicate concerns. “It could be one of those things that has a delayed impact depending on if everyone has already paid for their trips or not,” Haley says. So far, there has been no wash of cancellations of trips and bookings remain steady. It could well be that, just as in real estate, the traveler with wealth to accommodate an international visit to a resort town like Sarasota simply won’t be impacted by the Brexit vote.

And what of local investors? This may be where the greatest anxiety lies on the Gulf Coast pertaining to the international decision. Raul Elizalde, president of Sarasota-based Path Financial, says the Brexit vote will undoubtedly be a net negative for now. “The rational response, especially for those who depend on their portfolios for retirement, may well be to choose a certain outcome (known losses) over an uncertain one (far larger losses down the road),” he says. He advises clients right now to reduce exposure to those risks. But he also hopes the Brexit vote prompts policy changes in the European Union to preserve Germany and France’s membership, which could signal long-term health in European markets. Meanwhile, Evan Guido, director of Baird’s Evan Guido Group in Sarasota, notes volatility in a specific overseas market could mean strong investment stateside. “For US investors, the weakness in the equity markets is anticipated to be short-lived,” Guido says. “The uncertainty in Europe is likely causing foreign investors to increase exposure to US securities over the immediate term.”